Fiat Chrysler Deal With Union Averts Strike in Canada

A 2017 Chrysler Pacifica on the line at the refurbished assembly plant in Windsor, Ontario.Credit
Carlos Osorio/Associated Press

Fiat Chrysler Automobiles avoided a strike late Monday night by about 10,000 employees at three plants in Canada.

The company reached a last-minute settlement with the workers’ union, Unifor, which mirrors the main points in a contract that workers reached last month with General Motors of Canada.

Taking the approach used by the United Auto Workers in the United States, Unifor seeks the same contract terms from the three Detroit-based carmakers, arguing that none of them should have a cost advantage on labor.

Jerry Dias, the president of Unifor, said the direct intervention of Sergio Marchionne, the chief executive of Fiat Chrysler Automobiles, or FCA, led to the successful resolution of the talks.

“Sergio Marchionne isn’t a charm school graduate,” Mr. Dias said at a news conference. “We debated and argued.”

Throughout the talks, the union made it clear that it was pushing Fiat Chrysler to invest in an aging assembly plant in suburban Toronto.

FCA Canada, which is based in Windsor, Ontario, said it would not comment on the deal until the unionized workers ratified it. Mr. Dias said that vote would take place this weekend.

G.M.’s deal with Unifor involves investing to update two factories.

Mr. Dias said Fiat Chrysler had agreed to spending 325 million Canadian dollars, or about $246 million, to rebuild the paint shop in its Brampton, Ontario, assembly plant. The current paint shop, Mr. Dias said, is more than 30 years old, leading to concerns that the factory would be closed when the large, rear-wheel-drive cars it serves reach another model cycle in about four years.

The company’s commitment does not depend on government financial support, Mr. Dias said. He did, however, say that the union would seek support from the government to help retool the rest of the factory.

Jerry Dias, president of Unifor, which has sought the same contract terms from the three Detroit-based carmakers.Credit
Chris Wattie/Reuters

Fiat Chrysler also agreed to accelerate the pace at which new workers move up to full wages, another provision of the G.M. deal.

That had been a sticking point.

“FCA says it’s too rich,” Denise Hammond, a spokeswoman for Unifor, said of the union’s pay demand earlier on Monday. “But our members deserve this, and it’s only fair after years of zeros they have received.”

While Fiat Chrysler is the largest employer in Canada among the three Detroit-based car companies, it is also the weakest financially. As of last month, it was third over all in sales in the United States. While it had a pickup truck and two Jeep models in the top 20 selling vehicles in the American market, none of its passenger cars made the list.

A walkout would have affected Chrysler’s only minivan plant, which is in Windsor and was recently refurbished at a cost of about 3 billion Canadian dollars for the production of a new model. Other factories where a strike was threatened were the assembly plant in Brampton and an aluminum casting factory in Toronto.

Mr. Dias said Chrysler would invest in the casting plant, but he did not offer specifics and acknowledged that some workers there would be laid off.

Because the overwhelming majority of vehicles made by Fiat Chrysler in Canada are exported to the United States, a strike would have mainly affected the American market.

As it did with G.M., Mr. Dias said, the union focused negotiations on preserving jobs in Canada.

Unifor’s main concern about jobs involved the Brampton factory. The plant produces a line of cars, including the Chrysler 300, with origins dating from the time when Daimler, the parent company of Mercedes-Benz, owned Chrysler. But in recent years, Chrysler’s greatest sales successes have come from vehicles not made in Canada: sport utility vehicles, particularly its Jeep brand, and Ram pickup trucks.

Some parts made by the aluminum plant, in the Etobicoke area of Toronto, are used in two Chrysler cars — the Dodge Dart and the Chrysler 200 — that are being discontinued. Mr. Dias said that would force some layoffs, although he added that the union would attempt to place those workers in Brampton.

Last month, G.M. agreed to give new workers raises during their first three years with the company. That was in contrast to previous agreements, which had frozen wages during the first three years. In exchange, the union agreed to move new workers to defined contribution pensions — one requiring employees to contribute their own money — rather than traditional, employer-provided pensions.

But the union said it was told by Fiat Chrysler executives during negotiations that early raises would be problematic because the company recently added a large number of workers — 1,200 — in Windsor after renovations there for production of the Chrysler Pacifica minivan. Mr. Dias said the company had about 500 new employees elsewhere.